Four Accused of Salmonella Coverup

ENLARGE

Stewart Parnell, the former owner of Peanut Corp. of America, leaving a 2009 government hearing on the salmonella outbreak linked to products that originated in a Peanut Corp. facility. Hundreds of people were sickened and nine died, including Nellie Napier.
Washington Post/Getty Images

By

Brent Kendall and

Devlin Barrett

Updated Feb. 21, 2013 8:22 p.m. ET

WASHINGTON—The federal government brought felony charges against the former head of a peanut-processing company in connection with a deadly 2008-09 salmonella outbreak, in a case that one lawyer called the biggest of its kind in decades.

Food-poisoning cases have rarely led to criminal prosecutions in the past, but that may be changing; at least two other federal probes are under way into separate outbreaks.

The Justice Department on Thursday alleged that Stewart Parnell, the former owner of Peanut Corp. of America, and other employees engaged in a multiyear conspiracy to hide the fact that many of the company's products were tainted with salmonella.

The U.S. government charged owners of a plant blamed for a 2008 peanut butter salmonella outbreak that killed nine people and sickened about 700. Peanut Corp. of America went out of business after the outbreak. Brent Kendall has details on The News Hub. Photo: AP.

Hundreds of people around the country got sick and nine died after eating peanut butter or other products that originated in a Peanut Corp. facility, according to the Centers for Disease Control and Prevention.

Prosecutors said the company failed to notify its customers—including several national food companies—when independent lab tests revealed the presence of salmonella. In some cases, company officials fabricated lab results, stating peanut products were salmonella-free even when tests showed otherwise, or when no tests had been conducted at all, the Justice Department said.

The 76-count indictment against Mr. Parnell and ex-employees includes charges of conspiracy, wire fraud, obstruction of justice and introducing adulterated food into the market.

A law firm representing Mr. Parnell said he would prepare a vigorous defense.

"As this matter progresses it will become clear that Mr. Parnell never intentionally shipped or intentionally caused to be shipped any tainted food products capable of harming PCA's customers," the law firm said. It said federal regulators made regular visits to the company's facility in Georgia and didn't object to the way it was testing for salmonella. Mr. Parnell declined to comment beyond his law firm's statement.

ENLARGE

Nellie Napier
Associated Press

A 2009 Food and Drug Administration inspection of Peanut Corp.'s Blakely, Ga., plant found the company didn't clean adequately or take proper precautions to prevent food contamination. The FDA also said the plant had a leaky roof, poor ventilation and inadequate pest control.

The company at the time didn't respond to The Wall Street Journal's requests for comment about the FDA report on the inspection, released in January 2009.

Randy Napier, a North Carolina resident whose mother died in 2009 after eating contaminated peanut butter, said the charges brought him one step closer to closure. "I'm ecstatic," he said. "I was beginning to wonder if this day would ever come."

Bill Marler, a Seattle lawyer who represents victims of food-borne illnesses, including in the Peanut Corp. case, said the charges would make other food executives take notice.

"In 20 years, this is the first time I've seen a criminal indictment of this magnitude," said Mr. Marler, who added he has also been contacted by federal law-enforcement officials investigating a 2010 salmonella outbreak linked to eggs from Iowa and a 2011 Colorado listeria outbreak linked to cantaloupes.

The recent outbreaks prompted Congress two years ago to strengthen the federal government's food-safety powers. In a more recent salmonella outbreak linked to peanut butter, involving products sold by various retailers, the Food and Drug Administration used its new authority last November to shut down Sunland Inc.'s plant in New Mexico. Sunland said in a news release this week that it has reassessed its operations and controls in the wake of the outbreak and hopes to restart its peanut butter plant.

Tainted Food

The U.S. has seen several major outbreaks of food poisoning in recent years.

2008-2009 Salmonella in peanut butter blamed for nine deaths. Former owner and employees of Peanut Corp. of America charged Thursday with crimes tied to alleged coverup; a law firm said former owner denies allegations.

2012 Peanut butter made by Sunland Inc. linked to 42 cases of salmonella poisoning. Federal officials shut down Sunland plant; company said it is addressing problems.

Sources: Centers for Disease Control and Prevention, WSJ research

After a customer notified Mr. Parnell that Peanut Corp. products had tested positive for salmonella, the owner allegedly responded—falsely—that he was "dumbfounded" by the finding and had never "seen any instance of this," according to the indictment.

In one internal email, Mr. Parnell allegedly told employees they could not waste peanuts. "These are not peanuts you are throwing away every day…IT IS MONEY," he wrote, according to the indictment.

The indictment also charged Mr. Parnell's brother, Michael Parnell, a former supervisor. Michael Parnell declined to comment. Two more employees were charged—former plant operator Samuel Lightsey and former quality-assurance manager Mary Wilkerson. Mr. Lightsey's lawyer said his client would plead not guilty. Attempts to locate Ms. Wilkerson were unsuccessful. The Justice Department said another former employee, Daniel Kilgore, pleaded guilty to several charges. Lawyers for Mr. Kilgore didn't respond to requests for comment.

Peanut Corp. sold peanut butter and peanut paste to companies that made products including cookies, crackers and pet food. More than 2,000 products were recalled. The company filed for Chapter 7 bankruptcy protection in early 2009, weeks after the outbreak began.

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